IDEAS home Printed from https://ideas.repec.org/p/dlw/wpaper/08-24..html
   My bibliography  Save this paper

Agglomeration Economies within IT-Producing and IT-Consuming Industries in U.S. Regions

Author

Listed:
  • Simon Condliffe

    (Department of Economics,West Chester University of Pennsylvania)

  • William Latham

    (Department of Economics,University of Delaware)

  • Christian Le Bas

    (Department of Economics,University of Lyon)

  • Frédéric Miribel

Abstract

This paper deals with the effects of the geographic concentration of economic activity on productivity through agglomeration economies in the U.S. economy. Our empirical study extends the literature on agglomeration economies in two directions. First we measure and compare the effects on productivity of geographic concentration in either information technology related activity (the IT sector) or in all other economic activities (the non-IT sector). Second we follow Jorgenson’s (2002) reasoning regarding the significance of the differences between IT-producing sectors and IT-using sectors and assess the differential effects of concentration in IT-producing sectors and concentration in IT-using sectors on productivity. We utilize four measures of agglomeration and analyze effects at two levels of geographic disaggregation: U.S. states and U.S. counties. We perform the analysis using a model drawn from the growth accounting literature in which total labor productivity in a region is the dependent variable. It is modeled as a function of the region’s capital-output ratio, the quality of the region’s labor supply as measured by the level of education, and an agglomeration variable measured by concentration in the IT or non-IT sectors or in the IT-producing or IT-using sectors. The cross section estimates for a single year yield mixed results. We find weak evidence in favor of an effect of concentration of IT activity on productivity at the state level. We find stronger effects on productivity at the county level from concentration in IT-producing sectors.

Suggested Citation

  • Simon Condliffe & William Latham & Christian Le Bas & Frédéric Miribel, 2008. "Agglomeration Economies within IT-Producing and IT-Consuming Industries in U.S. Regions," Working Papers 08-24, University of Delaware, Department of Economics.
    • Handle: RePEc:dlw:wpaper:08-24.
    as

    Download full text from publisher

    File URL: http://graduate.lerner.udel.edu/sites/default/files/ECON/PDFs/RePEc/dlw/WorkingPapers/2008/UDWP2008-24.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bettencourt, Luis M.A. & Lobo, Jose & Strumsky, Deborah, 2007. "Invention in the city: Increasing returns to patenting as a scaling function of metropolitan size," Research Policy, Elsevier, vol. 36(1), pages 107-120, February.
    2. Dale W. Jorgenson & Mun S. Ho & Kevin J. Stiroh, 2008. "A Retrospective Look at the U.S. Productivity Growth Resurgence," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 3-24, Winter.
    3. Ciccone, Antonio, 2002. "Agglomeration effects in Europe," European Economic Review, Elsevier, vol. 46(2), pages 213-227, February.
    4. Ajay Agrawal & Iain Cockburn & John McHale, 2003. "Gone But Not Forgotten: Labor Flows, Knowledge Spillovers, and Enduring Social Capital," NBER Working Papers 9950, National Bureau of Economic Research, Inc.
    5. Simon CONDLIFFE & William R. LATHAM, 2006. "Not So Footloose After All: Locational Behavior Of Information Technology Establishments In The United States, 1989-1998," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 24, pages 45-60.
    6. Stuart S. Rosenthal & William C. Strange, 2003. "Geography, Industrial Organization, and Agglomeration," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 377-393, May.
    7. Mirko Draca & Raffaella Sadun & John Van Reenen, 2006. "Productivity and ICT: A Review of the Evidence," CEP Discussion Papers dp0749, Centre for Economic Performance, LSE.
    8. Koski, H. & Rouvinen, P. & Yla-Anttila, P., 2002. "ICT clusters in Europe The great central banana and the small Nordic potato," Information Economics and Policy, Elsevier, vol. 14(2), pages 145-165, June.
    9. Henderson, Vernon & Kuncoro, Ari & Turner, Matt, 1995. "Industrial Development in Cities," Journal of Political Economy, University of Chicago Press, vol. 103(5), pages 1067-1090, October.
    10. Jane Pollard & Michael Storper, 1996. "A Tale of Twelve Cities: Metropolitan Employment Change in Dynamic Industries in the 1980s," Economic Geography, Taylor & Francis Journals, vol. 72(1), pages 1-22, January.
    11. Robert J. Barro & Xavier Sala-i-Martin, 2003. "Economic Growth, 2nd Edition," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262025531, December.
    12. Dale W. Jorgenson, 2001. "Information Technology and the U.S. Economy," Higher School of Economics Economic Journal Экономический журнал Высшей школы экономики, CyberLeninka;Федеральное государственное автономное образовательное учреждение высшего образования «Национальный исследовательский университет «Высшая школа экономики», vol. 5(1), pages 3-34.
    13. Glaeser, Edward L & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1992. "Growth in Cities," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1126-1152, December.
      • Edward L. Glaeser & Hedi D. Kallal & Jose A. Scheinkman & Andrei Shleifer, 1991. "Growth in Cities," NBER Working Papers 3787, National Bureau of Economic Research, Inc.
      • Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992. "Growth in Cities," Scholarly Articles 3451309, Harvard University Department of Economics.
    14. Audretsch, David B & Feldman, Maryann P, 1995. "Innovative Clusters and the Industry Life Cycle," CEPR Discussion Papers 1161, C.E.P.R. Discussion Papers.
    15. Ajay Agrawal & Devesh Kapur & John McHale, 2007. "Birds of a Feather - Better Together? Exploring the Optimal Spatial Distribution of Ethnic Inventors," NBER Working Papers 12823, National Bureau of Economic Research, Inc.
    16. Antonelli, Cristiano, 2001. "The Microeconomics of Technological Systems," OUP Catalogue, Oxford University Press, number 9780199245536.
    17. Bryn Battersby, 2007. "Does distance matter?: The effect of geographic isolation on productivity levels," OECD Economic Studies, OECD Publishing, vol. 2006(1), pages 205-225.
    18. Christian Le Bas & Frédéric Miribel, 2005. "The agglomeration economies associated with information technology activities: an empirical study of the US economy," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 14(2), pages 343-363, April.
    19. Beardsell, Mark & Henderson, Vernon, 1999. "Spatial evolution of the computer industry in the USA," European Economic Review, Elsevier, vol. 43(2), pages 431-456, February.
    20. Dominique Foray, 2006. "The Economics of Knowledge," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262562235, December.
    21. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Martijn J. Smit, 2017. "Cross-border agglomeration benefits," Letters in Spatial and Resource Sciences, Springer, vol. 10(3), pages 375-383, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. van Oort, F.G. & Stam, F.C., 2006. "Agglomeration Economies and Entrepreneurship in the ICT Industry," ERIM Report Series Research in Management ERS-2006-016-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    2. Henderson, J. Vernon, 2003. "Marshall's scale economies," Journal of Urban Economics, Elsevier, vol. 53(1), pages 1-28, January.
    3. Argentino Pessoa, 2014. "Agglomeration and regional growth policy: externalities versus comparative advantages," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(1), pages 1-27, August.
    4. Emanuela Marrocu & Raffaele Paci & Stefano Usai, 2013. "Productivity Growth In The Old And New Europe: The Role Of Agglomeration Externalities," Journal of Regional Science, Wiley Blackwell, vol. 53(3), pages 418-442, August.
    5. J. Vernon Henderson, Zmarak Shalizi, and Anthony J. Venables, 2001. "Geography and development," Journal of Economic Geography, Oxford University Press, vol. 1(1), pages 81-105, January.
    6. Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2011. "Spatial concentration and plant-level productivity in France," Journal of Urban Economics, Elsevier, vol. 69(2), pages 182-195, March.
    7. William R. Kerr, 2010. "Breakthrough Inventions and Migrating Clusters of Innovation," NBER Chapters, in: Cities and Entrepreneurship, National Bureau of Economic Research, Inc.
    8. Combes, Pierre-Philippe & Lafourcade, Miren & Thisse, Jacques-François & Toutain, Jean-Claude, 2011. "The rise and fall of spatial inequalities in France: A long-run perspective," Explorations in Economic History, Elsevier, vol. 48(2), pages 243-271, April.
    9. Hanlon, W. Walker & Miscio, Antonio, 2017. "Agglomeration: A long-run panel data approach," Journal of Urban Economics, Elsevier, vol. 99(C), pages 1-14.
    10. Yacine Belarbi & Abdallah Zouache, 2007. "Regional Employment Growth and Spatial Dependencies in Algeria (1998-2005)," Post-Print ujm-00177453, HAL.
    11. Feldman, Maryann P. & Kogler, Dieter F., 2010. "Stylized Facts in the Geography of Innovation," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 381-410, Elsevier.
    12. Martijn J. Burger & Frank G. Oort & Otto Raspe, 2011. "Agglomeration and New Establishment Survival: A Mixed Hierarchical and Cross-Classified Model," Advances in Spatial Science, in: Karima Kourtit & Peter Nijkamp & Roger R. Stough (ed.), Drivers of Innovation, Entrepreneurship and Regional Dynamics, pages 45-63, Springer.
    13. Burger, M.J. & van Oort, F.G. & van der Knaap, G.A., 2008. "A Treatise on the Geographical Scale of Agglomeration Externalities and the Modifiable Areal Unit Problem," ERIM Report Series Research in Management ERS-2008-076-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    14. Beaudry, Catherine & Schiffauerova, Andrea, 2009. "Who's right, Marshall or Jacobs? The localization versus urbanization debate," Research Policy, Elsevier, vol. 38(2), pages 318-337, March.
    15. Mion, Giordano, 2004. "Spatial externalities and empirical analysis: the case of Italy," Journal of Urban Economics, Elsevier, vol. 56(1), pages 97-118, July.
    16. Südekum, Jens, 2008. "Convergence of the skill composition across German regions," Regional Science and Urban Economics, Elsevier, vol. 38(2), pages 148-159, March.
    17. Combes, Pierre-Philippe & Gobillon, Laurent, 2015. "The Empirics of Agglomeration Economies," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 247-348, Elsevier.
    18. BARRIOS, Salvador & BERTINELLI, Luisito & STROBL, Eric, 2002. "Coagglomeration and growth," LIDAM Discussion Papers CORE 2002053, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    19. Frank G. van Oort & Martijn J. Burger & Joris Knoben & Otto Raspe, 2012. "Multilevel Approaches And The Firm-Agglomeration Ambiguity In Economic Growth Studies," Journal of Economic Surveys, Wiley Blackwell, vol. 26(3), pages 468-491, July.
    20. Hongjian Su & Houkai Wei & Jian Zhao, 2017. "Density effect and optimum density of the urban population in China," Urban Studies, Urban Studies Journal Limited, vol. 54(7), pages 1760-1777, May.

    More about this item

    Keywords

    Agglomeration Economies; Information Technology; Productivity;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D62 - Microeconomics - - Welfare Economics - - - Externalities

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dlw:wpaper:08-24.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Saul Hoffman (email available below). General contact details of provider: https://edirc.repec.org/data/deudeus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.